The difficulty of mining a bitcoin (BTC) block dropped 0.35% on Thursday, the second time this month, after a consistent climb since November.
- On March 3, mining difficulty dropped 1.5%, data from information platform Glassnode shows.
- The difficulty adjusts automatically relative to the computing power on the network, also known as the hashrate, to keep the time between each mined block relatively stable at 10 minutes.
- The bitcoin mining hashrate has dropped from an all-time high in February of 248 exahash/second (EH/s) to 216 EH/s on March 17, according to Glassnode data.
- "This slight drop is likely due to unprofitable miners unplugging ASICs (application-specific integrated circuits). As energy prices increase globally, we will likely see more ASICs fall off the network," Compass Mining founder and CEO Whitt Gibbs told CoinDesk in a Telegram message on Friday.
- Electricity prices are soaring across the world as one of the world's largest exporters of fossil fuels, Russia, is enthralled in a war with Ukraine, and global energy supply chains are being severed by sanctions.
- "My bet is that Kazakh miners going offline due to electricity shortages and a government crackdown on illegal mining caused the drop," Jaran Mellerud, researcher at Oslo-based Arcane Research, told CoinDesk.
- "Using HashrateIndex's prices per TH (terahash, a measurement of the hashrate, the computing power on the bitcoin mining network) for rigs with medium efficiency, the Kazakh government should have seized around 3 TH/s worth of mining rigs, equivalent to 1.5% of bitcoin's hashrate," Mellerud said.
- Despite the fact that North American miners continue to plug in new machines, "the withdrawal of capacity from Kazakhstan is currently limiting bitcoin's hashrate growth," he said.
UPDATE (March 18, 8:40 UTC): Adds comment from Mellerud and details about Kazakhstan in last four bullets.
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